Rural-urban gap widening

Top 10 per cent owns almost half of all private assets. Urban incomes growing fast; rural areas get poorer as a result of land expropriation and soaring medical costs.

Beijing (AsiaNews/Agencies) – China's income disparity has widened dramatically in the past 20 years and is reaching Latin American proportions, this according to a report by the ChineseAcademy of Social Sciences (CASS).

The richest 10 per cent of Chinese families now own about 45 per cent of all private assets, whilst the poorest 10 per cent share less than two percent of the total wealth. In 2005, the average annual per-capita income of urban residents in Beijing was 17,653 yuan (US$ 2,263) whilst people in China's Qinghai Province earned an average of only 8,057 yuan (US$ 1,033) a year, government figures show. But farmers in Qinghai reported an average annual per capita income of 2,165 yuan (US$ 277) in 2005, just 25 percent of what local urban residents earned.

Increasing medical costs have become the biggest burden facing Chinese people. The report shows that 11.8 percent of the household expenditures go to health care.

“Soaring medical costs have plunged many rural and urban Chinese back into poverty,” said Li Peilin, a sociologist at CASS and the report’s editor.

Health care costs are not the only reason for poverty. Abusive behaviour by local leaders who favour industrial growth and urban development has been for some time another cause of rural poverty. Data reported months ago show that about 40 million farmers have lost their land as ever larger areas are appropriated for industrial and residential uses, and many are enraged over what they see as inadequate compensation. Moreover, having lost their land, older peasants cannot find employment, nor get social security.

Based on the Gini Coefficient, an indicator of income disparity that uses zero to indicate equal income distribution and one to represent the largest income disparity, China has reached 0.496, the report said. In comparison, income inequality figures are 0.33 inIndia, 0.41 in the US and 0.54 inBrazil.

The sociologists warn that a rising Gini index is a sign that such differences in wealth could lead to greater social tensions and unrest.

A survey by the China Youth Daily shows that about 90 per cent of Chinese believe the polarisation between the rich and poor is a "serious" threat in China. (PB)